Unintended consequences of the Sino-US trade conflict (I) – Surprise for China
While many observers see China as the underdog in its trade conflict with the US, Chinese President Xi Jinping said “China can come out of the trade war in better shape than the US”. His words may well have summarised an unintended consequence of the trade friction for China – President Xi may gain more domestic political capital which could facilitate his structural rebalancing efforts for the country and path the way for developing the renminbi as an asset class in the medium-term.
Any attempt to fully assess the impact of the trade dispute on China’s domestic development and foreign engagement must take into account the relationship between its middle class and the Chinese leadership. Since…
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China’s opening-up of its bond market – the third largest in the world – to foreign investors marks a turning point. It should allow investors to access a broad range of new instruments, possibly index products and bond ETFs, and boost their currently modest presence in this market.
The economic relationship between China and the US will be central to the global economy for years to come.
In a world striving for greater sustainability, investment in coal – be it mining or power generation – should be much more selective, hence our new coal investment policy. Also in this issue: how to navigate markets as they swing between the impact of news on the fundamentals and adjustments in central bank liquidity; what to make of the trends in US inflation; and our assessment of the relations and economies of China and the US.